Collector of Central Excise Vs. Somasundram Mills - Court Judgment

Excerpt:
1. in this application under section 35g of the central excises and salt act, 1944 arising out of the tribunal's order dated 14-12-1984 (annexure a), the applicants have required us to refer to the high court the questions reproduced in annexure b, hereto.the respondents herein engaged in the manufacture of non-cellulosic spun yarn falling under tariff item 18(e) of the first schedule to the central excise tariff act, 1944. the yarn manufactured is utilised in the same factory for manufacture of man-made fabrics, or in order words "captively consumed" in the factory. consequent to the orders of the appellate collector of central excise, dated 8-2-1980, the respondent filed a claim on 12-12-1980 for a sum of rs. 5,184/- being the differential duty paid on the non-cellulosic spun yarn.....

Judgment:
1. In this application under Section 35G of the Central Excises and Salt Act, 1944 arising out of the Tribunal's Order dated 14-12-1984 (Annexure A), the applicants have required us to refer to the High Court the questions reproduced in Annexure B, hereto.

The Respondents herein engaged in the manufacture of non-Cellulosic spun yarn falling under Tariff Item 18(E) of the first Schedule to the Central Excise Tariff Act, 1944. The yarn manufactured is utilised in the same factory for manufacture of Man-made fabrics, or in order words "Captively Consumed" in the factory. Consequent to the orders of the Appellate Collector of Central Excise, dated 8-2-1980, the Respondent filed a claim on 12-12-1980 for a sum of Rs. 5,184/- being the differential duty paid on the non-cellulosic spun yarn captively consumed in the manufacture of fabrics. The Respondent's claim for refund has been rejected by the Assistant Collector of Central Excise (Annexure C) and the same was confirmed on appeal to the Collector of Central Excise (Appeals), Madras. (Annexure D) on the ground that Section 51(2) of the Finance Act, 1982 laid down that all duties' of excise assessed or collected or purported to have been levied, assessed or collected before 20-2-1982 should be deemed to have been validly collected.

3. The Respondents filed an appeal before this Tribunal under Section 35B of the Central Excises and Salt Act, 1944. After hearing both the sides, the Tribunal allowed the appeal with the following findings as found in paragraph 7 of its order reproduced below :- "On consideration of the issues involved, I am inclined to hold that the point urged on behalf of the appellants is well founded in law.

Section 51(2) of the Finance Act, 1982 does not override or supersede or take away the effect of either Section 11B or 11 A. As a matter of fact, this particular point has also been dealt with by a Division Bench of the Delhi High Court in the case of 3.K. Cotton Spinning and Weaving Mills and Anr. v. Union of India and Ors., reported in CENEX Law Journal, PP. R. 35-36 wherein it has been clearly held that Section 51 of the Finance Act in question cannot have the effect of repealing Section 11A and 11B of the Central Excises and Salt Act. To a question from the Bench as to whether the Department would legally be in a position to recover the money if it had already been refunded to the appellants, the learned Senior Departmental Representative submitted that there is no provision under law on the basis of which such course could be adopted. Since the refund order in favour of the appellants has become final at the hands of a quasi-judicial authority and since Section 51 of the Finance Act, 1982 has to be read harmoniously with Sections 11A and 11B of the Central Excises and Salt Act, 1944. I am inclined to hold that the impugned order is not legally sustainable. In this view of the matter, I set aside the impugned order appealed against and allow the appeal as prayed for with consequential relief." 4. I have heard both sides to the reference application. As a result of discussion, it was agreed that only the following question would emerge for reference from the order of the Tribunal. Accordingly, I refer the following question under Section 35G of the Central Excises and Salt Act, 1944 to the Honourable High Court of Judicature at Madras : "Whether in the facts and circumstances of the case, the Tribunal was right in holding that on a harmonious interpretation of Section 51 of the Finance Act, 1982 and Sections 11A and 11B of the Central Excises and Salt Act, 1944, the order of refund has become final at the hands of a quasi-judicial authority."